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Stonewalling at the Social Innovation Fund

President Barack Obama's new Social Innovation Fund (SIF) has done many things well over the past few months. With $50 million in federal grant money to support innovative programs across the nation, SIF pulled together a selection process in record time, pushed out 11 grants to some of the very best organizations in the country, and is well on its way to becoming one of the most important efforts to stimulate social change in recent history.

Despite this initial success, SIF is also becoming a study in what doesn't work in government transparency. Contrary to the Obama administration's promise of sunshine in government, SIF has refused to provide basic information about its process for choosing the 11 winners. It has yet to release a full description of its final criteria, for example, the names of all reviewers, or even a simple list of all applicants. Apparently, SIF promised all applicants that the also-rans would never be named, even though it never issued written guidance to that effect.

Under pressure from the Nonprofit Quarterly, SIF has made a handful of relatively minor concessions. It has promised to open up the process next year and has released two brief explanations of its four-stage review process.

However, even though SIF has agreed to release the written applications from the 11 winners, it has set no deadlines for doing so. Moreover, there are rumors that the winners will be allowed to redact their applications to protect any information they deem inappropriate.

There is no excuse for the stonewalling. SIF is not a secret agency and these are not national security grants. SIF is but a small node at the Corporation for National and Community Service.

I was a reviewer during the first round of the application process and saw absolutely nothing that might justify the stonewalling. My two colleagues and I worked hard under intense pressure to rate the six proposals we received. I can attest that there was no pressure whatsoever to favor any applicants.

The criteria for each review were perfectly appropriate. Up to 45 points were to be awarded for program design, 35 points for organizational capacity, and 20 points for cost-effectiveness and budget. The final rating categories were also appropriate. Applications were to be rated as excellent, strong, satisfactory, or weak and nonresponsive.

The question is why SIF would be so cautious about releasing information. Perhaps the answer lies in the possible disconnection between some of the ratings and the final selections. Simply asked, how many applications were rated as weak and nonresponsive in a first-phase review, but won a grant anyway?

I know of at least one. I helped review it in the first round of the process. Despite the applicant's innovative track record, it provided insufficient information on its program, showed serious weaknesses in its capacity to manage federal dollars, and submitted meager assurances on cost-effectiveness and budget accuracy.

I have no idea how this applicant reached the winner's circle. My experience has been that a weak and nonresponsive rating is the death knell in a federal grant competition. I can only surmise that this applicant was invited to revise and resubmit. Such invitations are familiar in the federal grant process, but are rarely issued to applicants who receive an initial weak and nonresponsive rating.

Given the applicant's impressive lobbying effort on behalf of SIF, its success raises inevitable questions about fairness, conflicts of interest, and undue pressure. Was the applicant the only one invited to resubmit? Were others given the same chance? Who conducted the negotiations leading to the applicant's final budget, which was cut in half somewhere along the way? And just what happened in the "clarifying discussions" that SIF held with each of the 11 winners at the end of the process?

These questions deserve answers, if only to protect the reputation of the 10 other winners. But SIF's general behavior over the past weeks has been nothing short of weak and non-responsive. The longer SIF keeps its records closed, the more the controversy will build. Sooner or later, this story will reach Sen. Charles Grassley (R-IA) and Rep. Darrell Issa (R-CA), with all that means for national headlines.

SIF would be well advised to release everything now. With next year's appropriation pending, SIF's very existence is at risk. It should not be sacrificed because its leaders insist on needless secrecy.

Comments

What's so disappointing to me, reading this column, and the associated commentary it has generated, is how it reinforces the old narrative that government is unavoidably corrupt. There's a veiled accusation of insider trading, which is unfortunate. I didn't take part in the reviewing process of the SIF, so I can only judge the process by its outcome, which appears perfectly acceptable to me. The winners have demonstrated that they know how to identify organizations that are making headway on major social problems. I suspect that most of your readers here have no clue how well this $50 million will be spent. Sadly, many of them will come away with mistaken the notion that this is another example of government waste or hubris. And that is both unhelpful and untrue.

Posted by: davidbornstein | August 26, 2010 1:55 AM

To the poster who never heard of "community organizing," Well, you may be too young. In the Peace Corps, 1961, the barrio of Sibacugnan, Catanduanes, Philippines I - PC worked with local community people to build a few real toilets - no water - lime was used to throw down the pit....the barrio had only one community toilet that flowed into the river. No nipa huts had indoor plumbing...it was a good idea...cut down on all the illness from feces in the river!

Posted by: judithclaire1939 | August 22, 2010 10:21 PM

With Obama, it's always one lie after another. Pure corruption.

Posted by: hunter340 | August 22, 2010 4:00 PM

Transparency? What's that? It was taken out of our leaders vocabulary at the time of his election!

Posted by: SeniorVet | August 22, 2010 12:54 PM

At best, this "Social Innovation Fund" is a disorganized mess that wastes millions of dollars. At worst, it nothing more than a slush fund for insiders.

In either case, members of Congress need to exercise oversight and demand accountability.

Posted by: junomoneta88 | August 22, 2010 10:18 AM

Sooo the big O has stolen another 50 million from the American taxpayer to hand out to his pals what's the surprise?

Posted by: LadyChurchillUSA | August 22, 2010 7:16 AM

Mr POTUS.....

No transparency yields TOTAL TRANSLUCENCY

WE SEE RIGHT THROUGH YOU.....as you are totally empty!

Posted by: DiscerningCitizen | August 22, 2010 5:33 AM

Mr. Light, This is known as doing business "The Chicago Way."

Posted by: janet8 | August 21, 2010 11:16 PM

If it is not a trend to socialism, why do we need social innovation?

Haiti has just taught the world a very valuable lesson. Put the Constitution first, above celebrity and popularity.

Posted by: CalP | August 21, 2010 1:53 PM

The problem described by Mr. Light is by no means the major issue readers should have with the Social Innovation Fund. Giving such an entity $50 million taxpayer dollars to stimulate "social change," which vague mandate in itself should raise serious unease, is the true crux at issue. Yet again we see the mentality that it is the government's responsibility to mold society and its instituitions to fit a paradigm that elitist opinion holds to be desirable. The entire concept of the SIF is flawed at the start, and is but further proof of the ineradicable urge of those of liberal persuasion in particular that their vision of American society is the only one warranting serious consideration, and that they have the right to use Federal resources (borrowed though they may be) to further said vision. A little less hubris is in order on this score.

Posted by: wtrowan | August 21, 2010 12:45 PM

Never in my life have I ever seen such a mess as what we have allowed to take place and gain such traction in this country as what we have going on now. This President,with all of his secret friends and there secret groups, this WH, this administration my GOD, it's a wonder, in these past 18-20 months were still a functing country, let a lone a functiong Govt. Secret fund[s] and my business, we can't get a loan or a grant to keep our business afloat. This WH and administration, is so corrupt it's sicking!

Posted by: SharkDr55 | August 21, 2010 12:32 PM

Obozo is a crooked democrat poverty pimp from that famous political sewer,Chicago. Whaddya mean he's not trustworthy?

Posted by: carlbatey | August 21, 2010 11:36 AM

Prior to obama, I had never heard of a job called "community organizer."

Prior to this column, I have never heard of "social innovation."

If obama is the source, it is automatically suspect. Is this socialism? Some race-oriented outreach?

Posted by: wmpowellfan | August 21, 2010 7:05 AM

Mr. Light's fiction here is supported by "rumors", "suppositions", and "surmises", all conveniently supporting his imaginary conclusions. What a fraud.

Posted by: josephfranklyn | August 20, 2010 11:42 PM

$50 million in grant money for "social innovation?" After reading this article, I have no idea of what the "social innovation" is that the taxpayers are paying for. Talk about transparency. Your concern is not about the taxpayers; it's about who gets the giveaway. And you certainly aren't concerned about the unconstitutional use of federal funds. This kind of program is why we're going broke, folks.

Posted by: allamer1 | August 20, 2010 8:02 PM

It appears, Mr. Light, that you are angry simply because your judgment as a reviewer was not persuasive with regard to one applicant in this social investment initiative. But rather than disclose the details surrounding the particular applicant, and why you think it was not deserving, you stand on "principle" in claiming a lack of transparency. It is ironic that you do so in such an opaque fashion -- no details, no specifics, just lots of innuendo, mixed with sour grapes.

Or, maybe you have a personal or financial interest in a competing candidate that did not win. Why should we assume you come to this controversy with clean hands?

Matter of fact...Mr. Light, show us your financial records!!!!

Posted by: bintaboo | August 20, 2010 4:45 PM

Paul, thanks for the nice plug for my book. I've responded to the "appearance of undue influence" point here: http://goo.gl/dv3a

Steve

Posted by: SteveGoldberg | August 20, 2010 3:42 PM

For someone who has been around the flagpole as many times as you have, I'm a little surprised at your apparent naivete regarding this slush fund.

If transparency is absent, you can be sure there is a good reason for it. Just because you saw nothing untoward during your review duty means NOTHING. You've already identified one applicant where politics played a role in the award. My guess is there are others.

SIF appears to be the LBJ War on Poverty in new duds. More money down a rathole.

Posted by: Curmudgeon10 | August 20, 2010 2:31 PM

Paul, good article. I'm sorry if I appear rude, but it seems to me you were simply used as window-dressing.

In situations like this, the fair and honest process of selecting the best-qualified applicant - which you appear to have participated in in good faith - is often just window-dressing. The REAL selection process is entirely driven by political patronage.

I assume that's what has gone on here. I'm sorry it happened, I'm sure you worked hard and thought that your work was being taken seriously.

.

Posted by: ZZim | August 20, 2010 1:50 PM

The reason for NOT identifying reviewers should be obvious. It is to prevent applicants from lobbying for their proposals by directly contacting reviewers. It is also to prevent unsuccessful applicants from mounting personal attacks on reviewers (yes, they will do that - I have been on a selection panel before to interview applicants for a job opening). I would never serve as a reviewer if I knew that my name was going to be published.

Posted by: FredinVicksburg | August 20, 2010 1:37 PM

Guess who's not going to be asked to review any more federal grants?

It sounds like Obama brought a little Chicago-style politics to his administration.

Posted by: ChiTownSkeptic | August 20, 2010 12:11 PM

We have had no transparency from Obama.

Posted by: joanz3 | August 20, 2010 9:44 AM

Steve Goldberg makes useful comments about the importance of SIF. His work on social entrepreneurship in Billions for Millions is well worth reading.

I agree that SIF is a very important program, but hope that all of SIF's supporters, including myself, recognize the need to protect the program on all levels. I am not just referring in my column to one organization. I am referring to SIF's overall response to the pressure for more transparency. I'm referring to the puzzling resistance to releasing even innocent information.

The point is that transparency is essential to protect the program from allegations that some of the proposals were somehow favored later in the process. It is the appearance of undue influence that matters most here. My experience is that appearance is almost always the source of controversy, and clearly state that SIF's stonewalling invites the questions.

I remain puzzled that SIF has refused even to list the 54 applicants that were initially accepted as fully-complicant with the Notice of Funding, and that it has been so tight with information on what are no doubt wonderful initiatives. Just open it up and provide the details. That's essential to protect the program. Steve is right that this program deserves credit. Why put it in jeopardy with unnecessary opaqueness?

Posted by: Paul Light | August 20, 2010 9:34 AM

Quit fighting kids - this is just another way for obama to pick his own followers for easy govenment cash to forward his Social Agenda!
Our money being used against us!!
Please 2012 - get here fast!! :-)

Posted by: thornegp2626 | August 20, 2010 8:31 AM

Let me see if I have this right. SIF is "becoming one of the most important efforts to stimulate social change in recent history," its selection process was conducted in record time and resulted in choosing 11 of "the very best organizations in the country," with "no pressure" to favor any applicants, using "perfectly appropriate" criteria. As a fellow SIF reviewer, I agree.

But, yet, you making sweeping assertions that SIF is "becoming a study in what doesn't work in government transparency," based on "rumors," "controversy" and "surmise," a fancy word for guess. Your sole basis is that you claim to know of "at least one" "weak and nonresponsive" applicant that received a grant, although you state that you "have no idea how this applicant reached the winner's circle."

Maybe you're right about that applicant, but you're inflammatory rhetoric and eager leaps to speculative conclusions can only force everyone involved to run for cover because "questions have been raised." You mention "the applicant's impressive lobbying effort on behalf of SIF" to imply that the applicant might have done something nefarious, offering wild conjectures about "revised" applications and unexplained "clarifying discussions." Soon, no doubt, we'll be hearing sage pontifications along the lines of "doesn't the White House know the cover-up is always worse than the crime."

This is sad and unfortunate. Even with its tiny size, SIF represents and important and courageous experiment by a forward-thinking administration to promote social progress by combining what the government does well (funding programs at scale) with what the social sector does well (fostering innovative solutions to difficult and incapacitating problems). It has attracted private funding from some our best foundations that exceeds the taxpayer money committed.

You have raised questions about just 1 of 69 applications, which can be investigated by the responsible oversight agency, the Office of Grants Policy and Operations. There is no basis to cast SIF's response as "weak and non-responsive," yet you seem willing to throw SIF to the wolves and let a promising cross-sector innovation become engulfed in a feeding frenzy of speculation and second-guessing. Are you really prepared to deny the beneficiaries of the final grantees the unprecedented financial and management leverage that SIF is on the verge of producing?

Posted by: SteveGoldberg | August 20, 2010 8:14 AM

was the money given to just black organizations...
that seems to be the way obama works...

Posted by: DwightCollins | August 20, 2010 5:30 AM

test

Posted by: jhpbriton | August 19, 2010 8:22 PM

Also very frighening that the U.S. government proposed big changes on Thursday to the way it works with companies to fight new disease threats such as flu, including reform at the FDA and setting up centers to make vaccines quickly.

The report from the Health and Human Services Department also lays out a plan for helping academic researchers and biotechnology companies develop promising new drugs and vaccines.

Yeah, right. Just like that phony swine flu vaccine disaster - spending billions for the WHO's false propaganda about the "killer" flu that was just a pussycat flu.

Spending scarce dollars to make potential health disasters to be funded by us during a depression is insane.